Technology may be wonderful for business, but it's also great for crooks. Electronic publishing, scanners, and high-quality color laser printers and copiers have made it easier than ever for forgers to commit check fraud.
Check fraud is a relatively low-risk crime that can be highly lucrative for the perpetrator--but costly for you. Annual losses are in the $10 billion range, and more than 1 million bad checks enter the banking system each day, says Alfonso Guerra Sr., president of Printech, a Miami-based software developer and business forms distributor. Here's how to protect yourself:
- Store checks in a secure area, and track check numbers so you quickly notice missing checks.
- Evaluate your issuing process for accuracy. Consider internal and external audits to detect potential risk areas.
- Reconcile your bank statements in a timely manner.
- Add security features to the paper your checks are printed on. Guerra suggests using at least three or four security features and including a warning sign on the check that indicates it is protected. Finally, notify your bank of the steps you have taken. "Should the bank pay a check that does not have a security feature you have told them about," he says, "then they are responsible for the loss."